Heritage Financial Corp

hf-wa.com

What Do They Do?

Provides commercial loans and deposit accounts to small and medium-sized businesses and their owners, and personal banking services to the general public.

How Do They Make Money?

Most income comes from interest on loans and investment securities, less interest paid on deposits and borrowings. The bank also collects account fees monthly or when transactions occur, and card fees when transactions occur.

revenue

Segment	Share	Revenue	How money arrives
Service charges and other fees	61% FY2022: 54%
Card revenue Usage-based	39% FY2022: 46%		Usage-based

Who Are Their Customers?

Personal and business banking customers choose among checking, savings, money market and certificate-of-deposit accounts; the bank also offers wealth-management advice.

Do Revenues Turn Into Profits?

Yes. It kept 21 cents of every revenue dollar as net income in FY2025 and turned 27 cents into free cash flow.

Net income, FY2025

21% of revenue

▲ +56% vs FY2024 ($43.3M, 14%)

Free cash flow, FY2025

27% of revenue

▲ +40% vs FY2024 ($61M, 20%)

How Are They Changing?

Since the FY2025 annual report

Latest quarter: Q2 FY2026, the three months to Jun 30, 2026

Revenue: ▲ +24%; vs $78.5M in Q2 FY2025
Net income: ▲ +44%; vs $12.2M in Q2 FY2025

Service charges and other fees share of service charges, other fees and card revenue vs 59.4% in Q2 FY2025

Growing. Revenue grew 48% in 4 years, from $212.8M in FY2021 to $314.2M in FY2025, about 10% a year.

Residential mortgage origination The older report says the bank originated residential real estate loans for sale or investment; the latest says it stopped originating them and may instead buy mortgage loans from other lenders.

Revenue over time

Service charges and other fees Card revenue

$20M$10M$0

FY2021 FY2022 FY2023 FY2024 FY2025

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